If you are a foreign company planning to enter Nepal, one of the first decisions you will face is private vs public company in Nepal. That choice directly affects your PAN card registration, tax exposure, governance obligations, and long-term scalability.
Many foreign investors underestimate this step. They assume PAN registration is a simple tax formality. In reality, PAN is the foundation of your legal and fiscal identity in Nepal. It determines how you open bank accounts, hire employees, invoice clients, repatriate profits, and remain compliant.
This guide explains the private vs public company in Nepal debate through a practical lens. We focus on PAN card registration, documentation, timelines, compliance risks, and investor-specific considerations. By the end, you will know which structure fits your goals and how to register your PAN smoothly.
A Permanent Account Number (PAN) is a unique tax identification number issued by Nepal’s Inland Revenue authorities.
Without a PAN, a company cannot legally operate in Nepal.
A valid PAN is required to:
For foreign companies, PAN is also a credibility signal. Banks, regulators, and counterparties all verify it.
Before discussing PAN registration, you need clarity on company structure.
A private limited company is the default choice for most foreign investors.
Key characteristics:
A public company is designed for capital-intensive or large-scale operations.
Key characteristics:
PAN registration is mandatory for both private and public companies, but the process depth differs.
| Factor | Private Company | Public Company |
|---|---|---|
| PAN application review | Standard | Enhanced scrutiny |
| Supporting documents | Fewer | Extensive |
| Processing time | Faster | Slower |
| Ongoing tax reporting | Moderate | High |
| Regulator coordination | Limited | Multi-agency |
Insight: PAN is issued by the same authority, but public companies undergo additional verification due to shareholder scale and public interest.
Regardless of structure, PAN registration follows a defined sequence.
You must first complete incorporation under Nepalese company law. PAN cannot be issued before this step.
Authorities verify ownership, control, and intended business activities.
Applications are submitted to the Inland Revenue Office assigned to your registered address.
Officials review documents, may request clarifications, and issue the PAN certificate.
Documentation is where private vs public company in Nepal differences become visible.
PAN delays usually come from avoidable errors.
A clean PAN application can save weeks of delay.
PAN registration is only the beginning.
Both structures are subject to corporate income tax, but:
Public companies must also comply with additional reporting standards.
A public company is not wrong. It is simply strategic.
Consider a public company if you:
For most foreign service providers, a private company is sufficient.
| Decision Area | Private Company | Public Company |
|---|---|---|
| Ideal for foreign SMEs | Yes | No |
| Capital raising | Limited | Strong |
| PAN registration speed | Faster | Slower |
| Compliance cost | Lower | Higher |
| Governance burden | Moderate | Heavy |
| Flexibility | High | Multi-agency |
Timelines depend on document readiness and regulator workload.
Foreign companies often view PAN as a backend task. That is a mistake.
A correctly registered PAN:
From a business development perspective, PAN compliance signals serious market intent.
Choosing between a private vs public company in Nepal is more than a legal formality. It shapes your PAN card registration, tax exposure, compliance workload, and long-term flexibility.
For most foreign companies, a private company offers faster PAN issuance, lower risk, and operational clarity. Public companies suit investors with scale, capital-raising goals, and long-term local presence.
Whichever path you choose, treat PAN registration as a foundational step. Get it right, and everything else becomes easier. Get it wrong, and delays compound quickly.
Yes. All foreign-owned entities must obtain a PAN before operating, hiring, or invoicing in Nepal.
Yes. Public companies face additional documentation and verification due to shareholder scale and disclosure rules.
Private companies usually receive PAN within 5–10 working days. Public companies may take longer.
Yes. In fact, PAN is required to open most corporate bank accounts in Nepal.
No. PAN is mandatory for all companies. VAT is required only if turnover thresholds are met.